Under Trump's slogan of "Make the Stock Market Great Again," why are global funds quietly abandoning Wall Street?

One year ago, when a former president returned to the White House and declared the goal of making the United States the hottest country in the world, the market held high expectations. However, the cold reality data provided a different answer. Since then, excluding the US, the global stock markets, measured by the MSCI index, have risen by approximately 30%. This figure is roughly twice the increase of the S&P 500 index during the same period.

This is the most severe underperformance of US stocks in the first year of a president’s term relative to the global market since 1993. Even though the S&P 500 index continues to hit new highs, according to historical data, the US stock market’s gain in this year ranks only ninth among post-WWII presidents, lagging behind Reagan, Clinton, and others, and even falling short of this president’s first term.

Market observers point out that while the AI boom and the resilience of the US economy provide support, policy-level uncertainties are the key factors. Repeated trade tariffs, unexpected interventions in foreign affairs, and public challenges to the Federal Reserve’s independence have combined to unsettle investors.

This unease is directly reflected in volatility. Data shows that in 2025, the 100 largest companies in the S&P 500 experienced 47 instances of significant declines exceeding 5 standard deviations, the highest frequency since 1998. Strategists comment that the winners and losers are changing too quickly, making it difficult for investors to keep up.

As a result, funds are seeking calmer waters. Against the backdrop of a weakening dollar and cooling US employment market, other global markets have started to gain momentum. The MSCI Emerging Markets Index rose over 30% last year, marking its best annual performance since 2017. Some believe that funds are chasing performance, and the idea that non-US markets will continue to outperform is no longer contrarian.

Of course, the absolute returns of US stocks remain attractive, with the S&P 500 achieving two consecutive years of double-digit growth. Some analysts insist that as long as policy noise is ignored and focus is placed on the long-term productivity gains brought by AI, the economy will continue to develop positively.

But the road ahead is not smooth. As midterm elections approach, historical data shows that this is usually a weak year for the stock market, as the risk of political deadlock increases. Currently, voter dissatisfaction with inflation and high interest rates has prompted authorities to target mortgage rates, credit card rates, and rising electricity costs.

Deeper impacts involve intervention in the central bank. The government’s move to initiate criminal investigations against the Federal Reserve chair is unprecedented, heightening market concerns about the Fed’s independence. With the current chair’s term ending soon, the nomination of the new candidate will become the next major source of uncertainty.

A strategist’s summary is straightforward: midterm election years are traditionally the worst performing years on the calendar. Generally, these elections are contentious, and what markets dislike most is uncertainty.

Follow me: for more real-time analysis and insights into the crypto market!

#GateSquareCreatorSpringIncentive

#GateEvery10MinutesGives1GramGold

#USEuropeTariffMarketImpact

#GateLaunchpadIMU